Bargain hunting pushes PSEi back to 5,900 level
LOCAL SHARES snapped their three-day losing streak as investors flocked to the market to buy stocks at low prices.
The benchmark Philippine Stock Exchange index ( PSEi) closed at 5,942.66 on Thursday, up 74.78 points or 1.27% from a day ago. The broader all shares index likewise gained 35.75 points or 1.01% to end at 3,563.65.
“The market ended higher today on last minute bargainhunting of shares, after three consecutive days of ending on red territory,” Timson Securities, Inc. Trader Darren T. Pangan said in a text message on Thursday.
After the PSEi nearly reached the 6,000 level at the end of last week, closing at 5,999.40 last Friday, it recorded three straight days of decline to pull it farther from the resistance level.
The rally on Thursday, which put it back to 5,900 after falling to 5,800 on Wednesday, can be attributed to a “technical bounce” or a “dead cat bounce”, Philstocks Financial, Inc. Research Associate Piper Chaucer E. Tan said.
“( This is what) we see when the stock or index has a series of losses, but with the underlying problem that the sell-off will most probably continue,” he said in a mobile message.
The movement of the market is likely driven by US markets at the moment because the local economy continues to suffer from the effects of the coronavirus pandemic, Mr. Tan said.
US stocks improved on Wednesday: the Dow Jones Industrial Average, S& P 500 and Nasdaq Composite indices grew 1.91%, 1.74% and 1.88%, respectively.
An added contributor is the concern that the 2021 budget may not be enacted on time due to the speakership row at the House of Representatives.
“Take a look at the budget impasse in 2019, which sent shocks to GDP ( gross domestic product) growth snapping our above- 6% growth since 2013. With the ongoing pandemic, I think this will exacerbate the (economic) contraction,” Mr. Tan said.
Sectoral indices all ended in green territory on Thursday. Mining and oil rose 205.24 points or 3.38% to 6,270.43; holding firms added 95.15 points or 1.56% to 6,195.39; industrials increased 118.94 points or 1.52% to 7,937.33; property went up 35.24 points or 1.29% to 2,766.86; services gained 10.92 points or 0.76% to 1,444.84; and financials climbed 2.49 points or 0.21% to 1,160.25.
Value turnover stood at P19.57 billion with 2.26 billion issues switching hands, jumping from the previous session’s P7.11 billion worth of 1.81 billion issues.
Advancers beat decliners, 130 against 71, while 39 names ended unchanged.
Foreign investors remained net sellers, with net outflows hitting P1.21 billion on Thursday, slightly lower than the P1.29 billion on Wednesday.